May 16, 2016 / 10:52 AM / in 2 years

BRIEF-Penn West Petroleum warns inability to continue as a going concern

May 16 (Reuters) - Penn West Petroleum Ltd

* Average production of 77,010 BOE per day for Q1

* Maintaining 2016 total expenditures guidance of $70 million

* Engaged in discussions with lenders to ensure that have necessary access to capital for remainder of 2016 and beyond

* “We have reduced our operating expense guidance to $17.00 - $18.00/BOE from $18.00 - $18.75/BOE” for 2016

* Qtrly FFO per share $0.09

* Qtrly loss per share $0.20

* 2016 annual average production guidance remains unchanged

* Discussions with lenders ongoing; targeting to have lenders agreements amending financial covenants signed prior to end of Q2

* Amendments with lenders would allow co to continue to focus on strengthening our balance sheet and reducing our debt level

* Benefited from lower than anticipated cost environment which meaningfully reduced costs in last 4 months of 2015 below accruals

* Annual production guidance remains unchanged at 60,000 - 64,000 BOE per day

* “We were not in default at march 31, 2016 on any financial covenants under agreements with our lenders”

* There is a risk that company will not be in compliance with its financial covenants at end of Q2 of 2016

* Risk of default resulted in uncertainty on company’s ability to continue as a going concern

* “We believe we are on track to meet our target to reduce our absolute operating costs by about 20 percent on a year over year, same field basis”

* Continuing to pursue asset dispositions, considering options including obtaining additional sources of capital from strategic investors

* If current low commodity price environment continues, co not able to certify, following end of Q2, compliance with senior debt to EBITDA or total debt to EBITDA financial covenants at June 30, 2016

* Penn West announces its financial and operational results for the first quarter ended march 31, 2016 Source text for Eikon: Further company coverage: (Bengaluru Newsroom: +1 646 223 8780)

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